By Anita Charlesworth
Article 50 has been triggered and a general election called to give the Prime Minister a personal mandate to negotiate the Brexit deal on her terms. Whatever the outcome of the election, the new government will have a daunting two years ahead. It's an immense undertaking and one that will probably demand the full attention of every branch of government. But Theresa May will know better than most that however hard governments try, events define governments as much as planned policy.
Some events are completely beyond any government’s control. Most, with hindsight, are not. Post-mortems of political crises usually highlight a range of government failures to anticipate and prepare for what was entirely predictable.
This government's success over the coming two years will depend in large part on its ability to focus on the right issues beyond Brexit. Not focusing on health would be a mistake.
There are deep tensions between the financial and political priorities for health care. This is most apparent in relation to policy on the NHS workforce. Reducing public spending from the peak of 45% of GDP following the banking crisis to closer to the tax base of 37% of GDP has been made possible by an incredibly tough government stance on pay for public sector workers. The NHS employs over a million people and over the last six years nurses’ pay (the biggest single staff group on the NHS's books) has fallen by six per cent when taking inflation into account.
The government is planning to extend that pay restraint until at least 2019. Capping NHS pay at below-inflation levels is a crucial part of the plan to get the NHS to balance its books. It accounts for at least a quarter of the savings target set for the NHS for the rest of the decade. But it's a policy under growing strain.
The NHS simply doesn't have enough nurses. In 2015 the official shortage was 22,000 nurses specialising in caring for adult patients. That’s almost ten per cent of the workforce. Overseas recruitment is therefore high and the EU a key source for staff to fill the domestic gap. The UK doesn't expect to have enough nurses at any point in this decade. Keeping those EU nurses already here and continuing to attract more is therefore vital. A recent leaked government document suggested that changes in immigration rules and a potential slowdown in the inflow of EU workers could result in a significant shortfall of nurses after Brexit.
But Brexit has an impact in another way: the devaluation of the pound since June 2016 is feeding a sharp rise in inflation. That means that the pay cap for nurses and other staff is going to bite even harder.
The recent NHS pay review body report estimated that by 2019 nurse pay will be 20% lower in real terms than in 2010 when inflation is measured using Retail Price Index (RPI) and 12% lower on the Consumer Price Index (CPI). Whichever measure of inflation you choose, staff across the NHS will have seen a pretty eye-watering cut in
their living standards for the best part of a decade.
The worry is that this policy is fast approaching its sell by date. Junior doctors spent much of last year in dispute with the government. Nurses are now considering industrial action too.
We are not training enough nurses, doing too little to stop nurses leaving, with the number leaving the NHS increasing year-on-year to 35,000 last year, and the outlook for international recruitment – historically the health service's get-out-of-jail-free card for poor workforce planning – is at risk. It’s a pretty toxic mix. Will it turn into a major political event? Nothing is certain but the chances are high.
Last year the House of Lords set up a select committee to look at the long-term sustainability of the NHS. When it reported on the findings this month, one of its key conclusions was that the lack of a strategy to secure the workforce the NHS and care system needs is the biggest internal threat to its sustainability. Work by the Health Foundation has found that too often funding and workforce policy are disconnected, undermining the drive to improve the quality and efficiency of care.
No government can fix everything but whatever the outcome of the June election, if the new government is to avoid being destabilised by events, it should pay attention to the committee’s findings. In the wake of Brexit, the government must focus on pay and nursing shortages to give the NHS a better chance of a sustainable future.
Anita Charlesworth is director of research and economics at the Health Foundation
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